Six pointers from BJP’s poll manifesto that could find way into budget
Finance minister Nirmala Sitharaman will present her first budget — also the first of the Narendra Modi government’s second term — on Friday. The government will see this budget as a continuation of its past five years in power. At the same time, the magnitude of the mandate to the Bharatiya Janata Party (BJP) and its allies may encourage the government to go for bold decisions. The budget also comes months before the states of Maharashtra and Jharkhand go to polls and as the prospect of a drought looms large in many parts of the country. One useful source for what to expect in this year’s budget is the BJP manifesto for the 2019 elections. Here are six pre-election promises that could find their way into the budget:
1 Interest-free loans for farmers
The manifesto promises short-term new agriculture loans up to Rs 1 lakh for one to five years through Kisan Credit Cards (KCCs) on the condition of prompt repayment of the principal amount. Currently, such loans are collateral free but attract a 7% rate of interest. There are almost 70 million KCCs in India, according to a reply by the government to a question in the Rajya Sabha in 2018.
2 Collateral-free credit up to Rs 50 lakh for entrepreneurs
This will work on the basis of the government guaranteeing 50% and 25% of the loan for female and male entrepreneurs. This will be a big boost to the existing Mudra scheme, which the government claims has given a big boost to entrepreneurship.
3 Creating 10,000 farmer cooperatives
The manifesto promises that the government will enable creation of 10,000 new Farmer Producer Organisations (FPOs) by 2022. This is accompanied by a promise that the government will help these bodies to directly market their output in big cities. This could help farmers in getting better prices and also allow the BJP to take on parties such as the Nationalist Congress Party in Maharashtra, which have a strong presence among farmers’ cooperatives.
4 Bringing back sugar under the public distribution system (PDS)
The beneficiary manifesto families promises at Rs to 13/kg. offer According per kg sugar to a every December month 2018 to PDS statement by the government, PDS had at least 800 million beneficiaries in India. Given the average household size of 4.3, this comes to around 186 million households. If all of these households were to be given 12 kg sugar every year, it will result in a distribution of 2.2 million tons of sugar through the PDS. The wholesale price of sugar in 2018-19 was Rs 35.2 per kg. At these prices, the government will be buying sugar worth around Rs 78000 crore every year. This will help both consumers, who will get it cheaper than market rates, and the crisis-ridden sugar industry and sugar cane farmers.
5 Increasing coverage of Ayushman Bharat to cover all ASHA and Anganwadi workers
Technically, this might amount to nothing, as the Ayushman Bharat scheme intends to cover 500 million poorest people, and it is unlikely that most ASHA and Anganwadi workers are outside this bracket. However, this will be good optics for the government.
6 Sops for traders registered with the Goods and Services Tax (GST) network
The manifesto promises accident insurance worth Rs 10 lakh for traders registered under GST and also promises a merchant credit card on the lines of KCC. These sops might give incentives to traders to register under GST and give a boost to both present and future revenues, which have missed current targets by a big margin.
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- The meeting will be held virtually this year due to the ongoing Covid-19 pandemic.
- The rule is to ensure that high net worth individuals who post huge sums of money per month in their EPF accounts do not get to misuse the provision of assured high interest.
- Pandey said the move is aimed at ensuring that government presence is not required in the private sector and foreign investments.